NBU to lift ban on non-residents' withdrawal of yield on Ukrainian govt bonds on April 1

MOSCOW. March 23 (Interfax) - The National Bank of Ukraine (NBU) on April 1, 2023 will lift a ban on withdrawal by non-residents of their yield on Ukrainian government bonds, Ukrainian media said, citing the regulator's press service.

The ban will be removed under a decision adopted by the NBU board on March 22, which is available for viewing on the bank's website and enters into force on March 23.

The press service said that the NBU, however, is postponing the adoption of a decision on the possibility of repatriating the funds invested in government bonds until there is a major reduction of security and macroeconomic risks.

The yield on Ukrainian government bonds held by non-residents will amount to the equivalent of around $120 million between April 2023 and the end of the year, the NBU said.

This amount may increase if non-residents buy more Ukrainian government bonds the coupon on which is to be paid after April 1, 2023, but it will not entail any considerable pressure on Ukraine's international reserves, the bank said.

The NBU believes that the possibility to repatriate the yield will prompt non-residents to reinvest the sum they will receive and amassed hryvnia-denominated funds in new bonds, a move that will contribute to the development of the government bonds market and will help minimize the risks of direct financing of the budget deficit by the NBU, thus reducing macro-financial stability threats.

As reported, in May 2022 the NBU banned non-residents from repatriating funds invested in Ukrainian government bonds.